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THE ONTARIO ENERGY BOARD
Year Ended December 31, 1960
phone em. 3-1211 ONTARIO ENERGY BOARD 79 ° BAY street
LOCAL 2-2851-2-3 TORONTO 2
March d, I96I.
Re: First Annual Report
I have the honour to send you herewith the
First Annual Report of The Ontario Energy Board to
December 31, i960.
Your obedient servant ,
The Honourable Robert W. Macaulay, Q.C,
Minister of Energy Resources,
FIRST ANNUAL REPORT
THE ONTARIO ENERGY BOARD
December 31, i960
TABLE OF CONTENTS
Summary of Energy Board Functions and Powers . 3
Applications Heard and Orders Issued 6
Revenue , 9
ONTARIO ENERGY BOARD, i960
The Ontario Energy Board* s predecessor, The Ontario Fuel
Board, was established by the enactment of The Ontario Fuel Board
Act, 1954, which was proclaimed in force by the Lieutenant
Governor on May 13, 1954. It consisted, in the first place, of
three members but, later in 1954, two more members were added,
making five in all. The Ontario Fuel Board Act, 1954, was
amended in 1955, 1956, 1957 and 195& but (except for Section 6,
195&) the Act and Amendments were repealed and The Energy Act,
i960, and The Ontario Energy Board Act, i960, were substituted
therefor, being proclaimed in force on September 1, i960.
The functions of the Ontario Fuel Board were partly
judicial and partly administrative in nature but, after September
1, i960, the administrative work, as described in The Energy Act,
i960, was transferred to the Department of Energy Resources. At
the same time, the Ontario Energy Board took over the judicial
part of the work, as prescribed by The Ontario Energy Board Act,
i960. The remainder of this report, therefore, will complement
the series of Annual Reports relating to the activities of the
Ontario Fuel Board up to the time of its demise on August 31,
i960, and will describe the work of the Ontario Energy Board
from its inception on September 1, until December 31, i960.
The composition, responsibilities and powers of the
Board are defined in The Ontario Energy Board Act, i960, and in
several sections of The Energy Act, i960. It is there enacted
that public hearings shall be held by the Board before any Order
is made relating to matters over which it has jurisdiction and
that written reasons shall be given for its decisions. The
Board may make Orders approving or fixing just rates and other
charges relating to the sale of gas, but it may also issue
interim Orders valid for not more than one year, decreasing the
rates charged for gas, without a hearing, when requested to do
so by the company concerned. Also, in addition to the powers
enumerated below, regarding the injection and storage of gas,
the Board may fix the rates which the person authorized may
charge for the storage of gas.
Provision is also made for appeals to the Lieutenant
Governor in Council and to the Court of Appeal.
Part II of The Energy Board Act relates to the functions
of the Energy Returns Officer, who is appointed by the Lieutenant
Governor in Council to assist the Board, primarily in financial
matters related to gas rates. This part of the Act also provides
the E.R.O. with authority to require returns and statements from
gas companies and also provides that this information remain
It is also prescribed that the Board shall make a report,
annually, tc the Minister, containing such information as the
Part II of The Energy Act provides that the construction
of pipe lines for oil or gas must not be undertaken unless, and
until, a public hearing has been held and an Order has been
obtained from the Board giving the applicant the right to con-
struct. At all public hearings, any persons interested have the
right to be heard.
In the event a pipe line company having leave to con-
struct a line is unable to reach agreement with the land-owners
concerned, a further hearing must be held by the Board, after
which the applicant may be authorized to expropriate land pro-
vided it is in the public interest. Provision is also made for a
Board of Arbitration to make awards relating to matters of com-
pensation, in cases where the amounts of such compensation for
expropriation or damage are in dispute.
SUMMARY OF ENERGY BOARD FUNCTIONS AND POWERS
The Energy Board Act, i960 .
1. To make Orders approving or fixing just and reasonable
rates for the sale of gas by persons engaged in:
(i) gas distribution;
(ii) gas transmission;
(iii) gas storage.
2. To make Orders authorizing persons to inject gas into,
store gas in and remove gas from designated gas storage
3. To make Orders for the payment of money out of the
Abandoned Works Fund .
4. To make Orders granting leave to discontinue the supply of
gas to any work or appliance.
5. To adjudicate, examine and report on the following matters
referred to the Board by the Lieutenant Governor that
require a public hearing:
Location and spacing of wells;
Designation of drainage units;
Joining of interests in a field or pool;
Exempting persons from compliance with the Act:
Exempting appliances from compliance with the Act;
Any question respecting energy that requires a
The Energy Act, i960 .
1. To make Orders respecting the revocation, suspension or
reinstatement ^f licences, permits or registration.
2. (a) Tc make Orders granting leave to construct pipe
lines for the transmission of oil or gas.
(b) To make Orders authorizing expropriation of land for
the purposes of an oil or gas pipe line.
The Municipal Franchises Act
1. To make Orders granting the approval of terms and
conditions nf franchise by-laws for the distribution
of gas in municipalities.
2. To make Orders granting Certificates of Public
Convenience and Necessity for the distribution of
gas in municipalities.
The Assessment Act
1. To designate the length and diameter of gas and oil
transmission lines for assessment purposes.
The following persons constituted the personnel of the
Board during the period September 1st, i960, to December 31st,
A.R. Crozier, Chairman
J.J. Wingfelder, Commissioner and Secretary
D.M. Treadgold, Commissioner
L.R. MacTavish, Commissioner
E.A. Allcut , Commissioner
Ivy C. Fidler, Secretary to the Chairman and Acting
Assistant Secretary to the Board
H.G. Clark, Board Engineer
W.P. Armes, Energy Returns Officer
APPLICATIONS HEARD AND ORDERS ISSUED
Approval of Terms and Conditions of
Franchise Agreements 5 5
(section 9 of The Municipal Franchises Act)
Certificates of Public Convenience and
Necessity 5 6
(section 8 of The Municipal Franchises Act)
Rate Orders (18 of these were extensions,
(The Ontario Fuel Board Act)
Leave to Construct Orders
(The Pipe Lines Act)
Expropriation Orders ( 1 parcel involved )
(The Pipe Lines Act)
Secondary Recovery Orders
(The Ontario Fuel Board Act)
Gas Storage Orders
(The Ontario Fuel Board Act)
General - 1
(Hearings held as result of matters
referred by Orders-in-Council)
* Fuel Board - period January 1/60 to August 31/60
* Energy Board - period September l/6o to December 31/60
The Ontario Energy Board is presently engaged in its
first major rate hearing, namely that of the Consumers' Gas
Company, which is the largest gas utility in Canada. It serves
92 municipalities and more than 200,000 customers.
This hearing commenced on September 2S, i960, and has
been adjourned three times, to give the company the necessary
opportunities to prepare data for the Board, which was not avail-
able at the time of the first hearing. Before December 31st, i960,
9 exhibits had been filed by the company, comprising in all, some
300 pages and the transcript of evidence covered 355 pages. The
hearing will be reconvened on January 9th, I96I, and it is antic-
ipated that the transcript may ultimately exceed 1000 pages.
The extensive deliberations are due mainly to the fact
that the Consumers' Gas Company was established over 110 years ago
and was organized and operated for the production of manufactured
gas, until the year 19 c 5. During this period, the company's rates
were not subject to Provincial Government regulation. In 1955,
the company commenced the distribution of natural gas and, at that
time, the company's rates came under the control of the Provincial
Government. These conditions have complicated the work of the
Board because much of the background material, that would normally
be used in situations of this kind, was not available. Conse-
quently, much research work has been necessary on the part of the
Board and its staff with regard to financial statements, account-
ing procedures and statistical information. The company has
co-operated with the Board in these matters. As this is the
first of a series of similar hearings, the Board and its staff
have studied rate cases in other jurisdictions, both in Canada
and the United States. It is anticipated that this hearing will
be completed in the spring of 1961 and that, thereafter, other
hearings will be commenced relating to the rates charged by-
other gas companies.
While some of the $k applications enumerated above,
related to routine matters of a relatively minor nature, others
were concerned with fundamental questions and the decisions made
thereon may have important influences on the entire gas and oil
Two examples of the latter are:-
(a) The injection and storage of natural gas in a
previously designated storage area was authorized.
This procedure results in the provision of a
reservoir of gas, that will facilitate the contin-
uity of gas supplies in the Province of Ontario
and will help to keep gas rates lower than would
otherwise be possible. Thus, the decision may
have an important bearing on the economics of the
(b) The Board was also directed, by Order-in-Council,
to adjudicate, examine and report on a water
flooding project in Lambton County for the
secondary recovery of oil from an old oil field
near Oil Springs. After interested parties had
been heard and following much deliberation, the
Board recommended that a regulation be passed,
permitting this operation. The project will
probably be undertaken early in I96I and will
increase, substantially, the recovery of oil
from a partially depleted oil field. This will
have the effect of making oil available that
would not otherwise be recoverable and, there-
fore, will extend the life of one of the oldest
oil fields in the Province of Ontario.
It is noteworthy, also, that 2& applications were heard
relating to the construction of transmission pipe lines for
providing gas services to areas in the Province that were not
previously served with that fuel.
Some of these applications provided for the replacement
of under-sized or obsolescent piping, thus providing increased
gas supplies to certain areas and enhancing public safety.
In compliance with the requirement of section 23 of The
Ontario Energy Board Act, I960, the Board fixes costs payable on
various types of Applications and Orders. There is a statutory-
tariff of $25 for filing an Application. Hearing costs vary
and are fixed at the discretion of the Board with due regard
being given to the circumstances, time required for the Hearing
and Consultants' costs, if any.
Board revenue for the calendar year i960 is as follows:
Ontario Fuel Board $ 5,450.00
(Jan. 1/60 to Aug. 31/60)
Ontario Energy Board 1,300.00
(Sept. 1/60 to Dec. 31/60)
All of which is respectfully submitted.
DATED at Toronto this day of March, 1961.